Welcome to Curious Business

Every Friday, I post a small insight into running Curio City and/or Blue Hills Editorial Services. My most recent posts are directly below. You can also start with the first post, or use the subject labels to the right to home in on particular topics. Feel free to comment on anything that interests you.

Friday, August 27, 2010

A nice little rally at the end of August couldn’t save a weak month. Curio City’s latest numbers are worrisome inasmuch as they extend and intensify July’s little slowdown and reflect a faltering national economy.

August isn’t especially important. The dollars behind those percentages are few enough that this could be meaningless…or it could presage a serious turn for the worse. Since gloom always outsells sunshine and lollipops, that’s my jumping-off point for today’s long economic lament. First, though, my numbers:

Shoppers are still placing a healthy 3-5 orders per day, but too many of them are only spending $10 or $15. Four $40 sales make for a decent day; four $10 sales…well, I’m never ungrateful for any order. But with 20 cents on the dollar going into my paycheck, I only pocket eight bucks.

Interesting tidbit: Most of this month’s profit shortfall came from my Venezuelan fraudster and from collecting less in shipping fees after I decided to absorb the USPS rate hike rather than pass it along. (Actually, “decided” is a stretch; I’m still shipping Priority packages at Parcel Post rates because I can’t find the interface text to add transit times to the pulldown list as described in my Comment on the linked post.)

Last August the economy was rising from the dead as life-giving federal stimulus money began to flow. This year it’s wilting again as the funds slowly run dry. The stimulus was too small and unfocused to kick-start self-sustaining growth. We elected Obama into a Depression-scale moment. We expected an FDR-scale effort. We needed a centralized 1930s-style WPA-inspired jobs program centered on public works. Instead we got tens of thousands of uncoordinated local projects scattered around by political clout. The COBRA subsidy and unemployment insurance extensions unquestionably saved Anne and I from ruin, and the Congressional Budget Office says that stimulus spending saved or created up to 3.3 million jobs, increased GDP by as much as 4.2%, and shaved 1.8% off the unemployment rate. It clearly staved off a worse disaster, but it wasn’t enough to restore economic momentum.

States recently got $26 billion to retain teachers, municipal workers, and other public employees. While keeping hundreds of thousands of those folks employed will help to forestall another crash, that won’t stimulate any new growth, either…and most of those surplus workers are only getting a year’s reprieve anyway unless state revenues improve dramatically. With Washington currently paralyzed by elections, the economy’s on its own until after November.

In light of July’s historic plunge in housing sales, I'm withdrawing my prediction of boom times. I had believed that the stimulus spending would coincide with and reinforce the business cycle’s natural upswing. I underestimated the economic damage that eight years of misrule allowed. The business cycle has a flat tire and nobody knows how to patch it.

Ironically, the economy is doing better here in Massachusetts. We’ve added 60,000 jobs in the past six months and are outpacing national economic growth. That’s ironic because Curio City does very little business in MA, where I’m compelled to collect sales tax.

There are no arrows left in the government quiver. The Fed can’t cut interest rates below zero and cheap money isn’t encouraging borrowing. Congress has already spent $814 billion (over 10 years) on Keynesian pump priming and debt anxiety won't permit much more of that. Tax rates are already too low to pay for existing programs, and the political willpower to raise them is flagging in the face of November elections. If it can’t cut interest rates, is afraid to print more money, can’t afford to cut taxes, and lacks the willpower to raise them, what’s a government to do? I suppose Obama could lead a press entourage to Walmart and buy socks.

Corporate America is racking up record profits and building impressive cash stockpiles as the biggest companies get by just fine without all those damned employees, thank you very much. Business-to-business activity is strong. International commerce is strong. How, then, do you persuade corporations to invest some of their trillions in new employees? Republicans will undoubtedly trot out the old tax-cut shibboleth. But tax cuts are only stimulative when taxes are too high to begin with – and rates are already at historic lows. Democrats would say – what? I haven’t heard them say anything convincing about jobs. More Keynesian spending? More consumer subsidies? Those work while they last, but don't seem to have any lasting impact except debt.

Corporations are not charities or agents of public policy. They’ll hire when they can’t squeeze enough productivity out of their beleaguered workforce to meet demand, and they need confidence that the demand will be sustained. Meanwhile, they are content to bide their time and build up cash.

Consumers, racked by years of high unemployment, falling housing values, and grim forecasts for more of the same, are not consuming. But with 90% of the labor force employed, why do the foundering 10% exert such a disproportionate drag? Because consumer psychology drives consumption, and consumption drives 70% of the economy. Unemployment may “only” be 10%, but the 25% of households that have a friend or family member out of work are afraid. That fear is throttling spending and holding us back. More than 60% of the respondents to this Boston Globe poll believe that we’re in for “another painful, prolonged downturn”. And this is in a state that’s faring better than average. When the masses expect and brace for hard times, we get hard times.

Ah, but Q4 is drawing near. The glorious fourth quarter…retail’s be-all and end-all, when we make fully half of our annual sales. A ray of hope. Will shoppers let the good times roll for Greedfest this year, or will they be stingy again?

American consumers have been binging since the Reagan administration; the current generation of young adults is more materialistic and impulsive than any that came before. Five years ago it looked like we'd go on consuming forever. Curio City depends upon people buying stuff they don’t need, and I still believe that their lifetime habit of indulging their wants will return. The big question is when, not if,their enthusiasm for accumulating stuff will overturn their fear.

It comes down to you, shoppers. You hold the power to kick-start the economy or drag it back into the swamp. Government won’t save you. Corporations are waiting for your cue. We have to rescue ourselves. Why not buy something from Curio City right now, while you’re drunk on your own power? Christmas is almost here. Start shopping now. Pick up something fun for yourself. Uncle Sam needs you!

Friday, August 20, 2010

This week Turnkey released an important Sunshop security upgrade. Mildly peeved because I just upgraded last month, I asked Brad to work his magic again. He quickly set things up to do the deed this morning.

But first, to Turnkey’s Support forum! I found a couple of doozies.

First, the new password encryption will invalidate existing customers’ logins. I have more than 1,500 accounts (although most people who create one never come back, so only a few hundred of those are active). That's a shame, but into each life a little rain must fall, right? It's worse than that, though: the Forgot Password link won’t work for them. The Admin (that’s me!) has to reset their accounts manually. Those who create an account and return to it are precisely the people whom I least want to alienate. Zounds!

Second, this upgrade (and all future versions of Sunshop) requires the server to have a particular superpower. Mine apparently doesn’t. If we’d upgraded as planned, my site might have stopped working entirely, possibly for days. Gadzooks!

A user-created fix for the first issue will make everything work as intended. Existing users can still use their old passwords, new accounts will use the new method, and everyone can change their password normally. The problem is that if I make this modification I’ll have to carry it forward manually through all future version upgrades to maintain support for old passwords. Zounds!

For the second issue, my web host proposed moving my site to a server that has the necessary support. Moving is not at all trivial. Then they backpedaled and said that my server has the necessary module installed after all. I lack faith in their support department and won't strike my Gadzooks until Brad confirms it.

This morning Turnkey published a repack that should solve the password problem. We'll reschedule the upgrade for next week. Meanwhile, I'm watching the forums for any new developments.

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Last week’s appeal to my Facebook followers grew my legion from 82 to 84. Can you feel the excitement building? Not to seem ungrateful – any growth is good -- I wish it was translating into sales. Next week’s numbers report won’t be anything to crow about.

Friday, August 13, 2010

I’ve had about 70 Facebook followers (formerly “fans”, now “likers” I guess) for half a year now. That number only fluctuates by a couple of people one way or the other. Yesterday it spiked to 82 people. Momentum! With your help I might reach my goal of 100 fans by the end of this year.

Who are you?

60% of you are female and 39% are male. The other 1% are either confused or a rounding error.

Women aged 45-54 are the single biggest demographic at 21%. Women aged 55+ are the next biggest at 14%. Men aged 35-44 are third with 12%. About 14% of you are under age 25.

Each one of you contributes 1.28% to the total.

83% of you are in the US. Malaysia, Peru, Chile, The Philippines, Venezuela, Panama (hi Rob!), the UK, Cyprus, and Mexico are also represented. I’ve shipped to all of those countries, although Malaysia is now blacklisted as a high-risk country.

How can I get 18 more followers and reach 100 in the next few months? I seldom post apart from my weekly blogcast, so that must be what draws new fans and repels existing ones. For a time I tried posting new product arrivals and stock status updates on FB, but I think that got annoying quickly – I have a low tolerance for advertising myself and am leery of wearing out my welcome. Announcing real news, such as vacation dates or discount offers or this weekend’s Massachusetts sales tax holiday, seems to be the best use of FB.

Facebook would love to sell me advertising. The cost is modest and the effort is slight. But what exactly would I advertise – my page? My store? A product? Who would see these ads and where would they appear? I’ve never seen an ad on FB myself. Of course, AdBlock for Firefox keeps me from seeing most ads anywhere, and apart from trying to figure out the marketing angle I don’t get very involved in FB. I have no idea whether or not there’s any value in advertising here.

Is it even worth reaching for 100?

Referring sites are one of my favorite free traffic sources. Nearly 12% of my visitors arrive via links from other sites. Facebook sends Curio City 25-30 visitors a week and is my #3 referral source. Since 3% of visitors buy something, FB delivers 3-4 sales per month (possibly more, since those visits are presumably motivated by posts that I make). That’s a typical day’s business during the slow months – not shabby at all.

Gaining 18 more FB followers would generate 0.6 more sales per month. OK, that’s not exactly the road to riches. But followers beget more followers – there’s a snowball effect that will eventually sustain itself. I think that threshold is around 100.

So if it’s not too much to ask…get out there and get begetting! Go to our page in your Favorites list and click “Suggest to Friends” beneath our logo. If you didn’t arrive at this blog post via FB, use the “Like” button near the top of the right-hand column to join.

Oh, and as long as I’m begging…don’t forget to click those ads between posts.

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Last week I mentioned that I’d spent $11 to intercept a fraudulent UPS shipment. It actually cost $11 for the interception…plus $35.05 for return freight…plus a $2.80 fuel surcharge. I suspected that they might bone me for return postage, and that they’d charge a premium for air shipment. The fuel surcharge is just plain insulting, though.

That brings the total cost of this criminal to $130, almost all of which went to UPS because I shipped too promptly. I’d have lost less money if I’d just let the thief have the merchandise, but the satisfaction of denying him anything tangible for all the trouble he caused is worth the cost.

Friday, August 06, 2010

Someone wanted $225 worth of clocks and watches giftwrapped and shipped to Miami via 2nd Day Air. It’s a little suspicious when somebody wants a big order right away...but one-stop gift shopping has been part of Curio City’s core concept from the beginning. With a US destination and a signature required on delivery, it didn’t look shady. The only red flag from my credit card processor’s “MaxMind” fraud control was an IP address in Venezuela…and lots of Miami residents have Central or South American roots. Since the MaxMind score was below the fraud tripwire, I wrapped everything and shipped it off at once.

That night a second large charge on a different card from the same customer was denied. The next morning the identical order went through successfully on a third credit card.

Oh, crap. This guy is laundering stolen cards. That initial order is going to come back as a chargeback, sure as hell. But at least this time I figured it out in time to stop further losses. I canceled the second order and voided the charge. My thief struck several more times as the day wore on, always with orders of $200 or more and always with a different credit card. When I figured out how to blacklist his IP address, he went away…for half a day. Ultimately I had to block four Venezuelan IP addresses and void three charges before he moved on to greener pastures.

Then a light bulb lit up: UPS has a package intercept option! For $11 I could have it returned to sender and refund the charge. Total loss to me: $69.92 for UPS shipping, plus $11 for the intercept, plus roughly $5 in AVS fees for all those credit card authorization checks, plus another $8 to process the original charge and its reversal. Call it $93. Without the intercept, I’d have lost the $225 charge and eaten a $25 chargeback fee. (The five-day interval between the charge and the refund still makes me nervous about a chargeback being generated, but I’d probably win a challenge if it does occur).

It’s screwed up when a $93 loss counts as a victory over the forces of evil. $93 is more than I earn in a bad week. But at least I’m learning how to spot the enemy and how to use the anti-fraud tools at my disposal. I’m not sure what the thief gained from all that activity – he wasn’t really after boxes of random merchandise from Curio City. Presumably he validated his stolen credit card numbers. Now what’s he do, sell them to somebody else? The only unambiguous winner in this go-round is UPS.

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After having Earthlink as our home ISP since 1997, I finally switched from DSL at 3 Mbps to cable internet at 15 Mbps. Sweet! Our municipal electric company is our new ISP. The taxpayer-owned nonprofit, which has fewer than 4,000 customers, now carries our phone, internet, and cable TV as well as our electric service. It’s really nice dealing with Donna on Quincy Avenue instead of some kid in India.

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Not speaking any other languages myself, I generally refrain from mocking foreigners’ mangled English. But this one is worth sharing: “Don't make yourself regret by slipping through the chance from your fingers.”